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The Advertiser
14 hours ago
- Business
- The Advertiser
BHP mulls mothballing coal mines over royalty regime
Weak commodity prices have weighed on the profit of one of the world's biggest miners, prompting BHP to slash its dividend and consider shuttering some of its coal mines. While BHP posted a 14 per cent lift in full-year net profit to $US9 billion ($A13.9 billion), underlying net profit fell more than a quarter to $US10.6 billion, shrinking the final shareholder to 60 US cents ($A0.92) per share, down from 74 US cents the year before. Chief executive Mike Henry said the result reflected the resilience of the Melbourne-headquartered group, which is a leading producer of iron ore, copper and coal. "We delivered on our full-year guidance across our suite of businesses and achieved record iron ore and copper production," he said on Tuesday. "Our operational results have underpinned another year of sector-leading margins and strong cash flows." Despite record iron ore and copper production, revenue slipped by $US4.4 billion because of coal and iron ore price weakness, but this was partially offset by stronger copper prices. Weaker revenues translated to softer earnings before interest, tax, depreciation and amortisation. Those earnings were down 10 per cent to $US29 billion, but underlying earnings from copper swelled to 45 per cent of group earnings to a record $US12.3 billion. Apart from sluggish commodity prices, BHP's financial report took aim at Queensland's royalty regime - introduced in 2022 by the state Labor government - and flagged some of the state's five coal mines operated under the BHP Mitsubishi Alliance (BMA) could be mothballed. "With no change to the ongoing negative impacts of extreme royalty rates, we will maintain our existing position of not investing in any further growth at BMA," the report stated. "If low coal prices persist, options to pause lower margin areas of our operational footprint will be considered." The alliance, which owns and operates the Hay Point Coal Terminal near Mackay, employs more than 10,000 full-time equivalent employees and contractors, according to Mitsubishi. Iron ore prices have been under pressure from weaker ore demand and steel oversupply and the outlook for global economic growth was mixed, BHP's boss said. "While economies around the world continue to navigate policy uncertainty, China and India again demonstrated resilient economic and commodity demand growth in the first half of this year," Mr Henry said. "Our commodities have large markets, resilient demand and steep cost curves. "The world is going to need a lot more steelmaking materials, a lot more copper and a lot more potash." As for the shrunken dividend, the CEO noted it was "well above" BHP's minimum payout ratio and represented a full-year payout of $US5.6 billion. "This is backed by a strong balance sheet, lower than expected capital spend and confidence in the long-term trajectory of our business," Mr Henry said. "This year, we contributed almost $US47 billion globally through wages, taxes, royalties, community contributions and payments to suppliers and shareholders." BHP held its capital guidance for exploration expenditure unchanged at $US11 billion. It also invested $US2.1 billion for a 50 per cent interest in the Vicuna joint venture, which includes one of the largest copper deposit discoveries of the past 30 years. Investors took the predominantly in-line report as a positive for BHP, pushing its shares 1.5 per cent higher to $42.07 in early afternoon trading. BHP's strong set of results highlighted the consistency of the business, RBC Capital Markets analyst Kaan Peker said. "The company is balancing its shift toward growth (namely in copper), and is continuing to pay compelling dividends." Weak commodity prices have weighed on the profit of one of the world's biggest miners, prompting BHP to slash its dividend and consider shuttering some of its coal mines. While BHP posted a 14 per cent lift in full-year net profit to $US9 billion ($A13.9 billion), underlying net profit fell more than a quarter to $US10.6 billion, shrinking the final shareholder to 60 US cents ($A0.92) per share, down from 74 US cents the year before. Chief executive Mike Henry said the result reflected the resilience of the Melbourne-headquartered group, which is a leading producer of iron ore, copper and coal. "We delivered on our full-year guidance across our suite of businesses and achieved record iron ore and copper production," he said on Tuesday. "Our operational results have underpinned another year of sector-leading margins and strong cash flows." Despite record iron ore and copper production, revenue slipped by $US4.4 billion because of coal and iron ore price weakness, but this was partially offset by stronger copper prices. Weaker revenues translated to softer earnings before interest, tax, depreciation and amortisation. Those earnings were down 10 per cent to $US29 billion, but underlying earnings from copper swelled to 45 per cent of group earnings to a record $US12.3 billion. Apart from sluggish commodity prices, BHP's financial report took aim at Queensland's royalty regime - introduced in 2022 by the state Labor government - and flagged some of the state's five coal mines operated under the BHP Mitsubishi Alliance (BMA) could be mothballed. "With no change to the ongoing negative impacts of extreme royalty rates, we will maintain our existing position of not investing in any further growth at BMA," the report stated. "If low coal prices persist, options to pause lower margin areas of our operational footprint will be considered." The alliance, which owns and operates the Hay Point Coal Terminal near Mackay, employs more than 10,000 full-time equivalent employees and contractors, according to Mitsubishi. Iron ore prices have been under pressure from weaker ore demand and steel oversupply and the outlook for global economic growth was mixed, BHP's boss said. "While economies around the world continue to navigate policy uncertainty, China and India again demonstrated resilient economic and commodity demand growth in the first half of this year," Mr Henry said. "Our commodities have large markets, resilient demand and steep cost curves. "The world is going to need a lot more steelmaking materials, a lot more copper and a lot more potash." As for the shrunken dividend, the CEO noted it was "well above" BHP's minimum payout ratio and represented a full-year payout of $US5.6 billion. "This is backed by a strong balance sheet, lower than expected capital spend and confidence in the long-term trajectory of our business," Mr Henry said. "This year, we contributed almost $US47 billion globally through wages, taxes, royalties, community contributions and payments to suppliers and shareholders." BHP held its capital guidance for exploration expenditure unchanged at $US11 billion. It also invested $US2.1 billion for a 50 per cent interest in the Vicuna joint venture, which includes one of the largest copper deposit discoveries of the past 30 years. Investors took the predominantly in-line report as a positive for BHP, pushing its shares 1.5 per cent higher to $42.07 in early afternoon trading. BHP's strong set of results highlighted the consistency of the business, RBC Capital Markets analyst Kaan Peker said. "The company is balancing its shift toward growth (namely in copper), and is continuing to pay compelling dividends." Weak commodity prices have weighed on the profit of one of the world's biggest miners, prompting BHP to slash its dividend and consider shuttering some of its coal mines. While BHP posted a 14 per cent lift in full-year net profit to $US9 billion ($A13.9 billion), underlying net profit fell more than a quarter to $US10.6 billion, shrinking the final shareholder to 60 US cents ($A0.92) per share, down from 74 US cents the year before. Chief executive Mike Henry said the result reflected the resilience of the Melbourne-headquartered group, which is a leading producer of iron ore, copper and coal. "We delivered on our full-year guidance across our suite of businesses and achieved record iron ore and copper production," he said on Tuesday. "Our operational results have underpinned another year of sector-leading margins and strong cash flows." Despite record iron ore and copper production, revenue slipped by $US4.4 billion because of coal and iron ore price weakness, but this was partially offset by stronger copper prices. Weaker revenues translated to softer earnings before interest, tax, depreciation and amortisation. Those earnings were down 10 per cent to $US29 billion, but underlying earnings from copper swelled to 45 per cent of group earnings to a record $US12.3 billion. Apart from sluggish commodity prices, BHP's financial report took aim at Queensland's royalty regime - introduced in 2022 by the state Labor government - and flagged some of the state's five coal mines operated under the BHP Mitsubishi Alliance (BMA) could be mothballed. "With no change to the ongoing negative impacts of extreme royalty rates, we will maintain our existing position of not investing in any further growth at BMA," the report stated. "If low coal prices persist, options to pause lower margin areas of our operational footprint will be considered." The alliance, which owns and operates the Hay Point Coal Terminal near Mackay, employs more than 10,000 full-time equivalent employees and contractors, according to Mitsubishi. Iron ore prices have been under pressure from weaker ore demand and steel oversupply and the outlook for global economic growth was mixed, BHP's boss said. "While economies around the world continue to navigate policy uncertainty, China and India again demonstrated resilient economic and commodity demand growth in the first half of this year," Mr Henry said. "Our commodities have large markets, resilient demand and steep cost curves. "The world is going to need a lot more steelmaking materials, a lot more copper and a lot more potash." As for the shrunken dividend, the CEO noted it was "well above" BHP's minimum payout ratio and represented a full-year payout of $US5.6 billion. "This is backed by a strong balance sheet, lower than expected capital spend and confidence in the long-term trajectory of our business," Mr Henry said. "This year, we contributed almost $US47 billion globally through wages, taxes, royalties, community contributions and payments to suppliers and shareholders." BHP held its capital guidance for exploration expenditure unchanged at $US11 billion. It also invested $US2.1 billion for a 50 per cent interest in the Vicuna joint venture, which includes one of the largest copper deposit discoveries of the past 30 years. Investors took the predominantly in-line report as a positive for BHP, pushing its shares 1.5 per cent higher to $42.07 in early afternoon trading. BHP's strong set of results highlighted the consistency of the business, RBC Capital Markets analyst Kaan Peker said. "The company is balancing its shift toward growth (namely in copper), and is continuing to pay compelling dividends." Weak commodity prices have weighed on the profit of one of the world's biggest miners, prompting BHP to slash its dividend and consider shuttering some of its coal mines. While BHP posted a 14 per cent lift in full-year net profit to $US9 billion ($A13.9 billion), underlying net profit fell more than a quarter to $US10.6 billion, shrinking the final shareholder to 60 US cents ($A0.92) per share, down from 74 US cents the year before. Chief executive Mike Henry said the result reflected the resilience of the Melbourne-headquartered group, which is a leading producer of iron ore, copper and coal. "We delivered on our full-year guidance across our suite of businesses and achieved record iron ore and copper production," he said on Tuesday. "Our operational results have underpinned another year of sector-leading margins and strong cash flows." Despite record iron ore and copper production, revenue slipped by $US4.4 billion because of coal and iron ore price weakness, but this was partially offset by stronger copper prices. Weaker revenues translated to softer earnings before interest, tax, depreciation and amortisation. Those earnings were down 10 per cent to $US29 billion, but underlying earnings from copper swelled to 45 per cent of group earnings to a record $US12.3 billion. Apart from sluggish commodity prices, BHP's financial report took aim at Queensland's royalty regime - introduced in 2022 by the state Labor government - and flagged some of the state's five coal mines operated under the BHP Mitsubishi Alliance (BMA) could be mothballed. "With no change to the ongoing negative impacts of extreme royalty rates, we will maintain our existing position of not investing in any further growth at BMA," the report stated. "If low coal prices persist, options to pause lower margin areas of our operational footprint will be considered." The alliance, which owns and operates the Hay Point Coal Terminal near Mackay, employs more than 10,000 full-time equivalent employees and contractors, according to Mitsubishi. Iron ore prices have been under pressure from weaker ore demand and steel oversupply and the outlook for global economic growth was mixed, BHP's boss said. "While economies around the world continue to navigate policy uncertainty, China and India again demonstrated resilient economic and commodity demand growth in the first half of this year," Mr Henry said. "Our commodities have large markets, resilient demand and steep cost curves. "The world is going to need a lot more steelmaking materials, a lot more copper and a lot more potash." As for the shrunken dividend, the CEO noted it was "well above" BHP's minimum payout ratio and represented a full-year payout of $US5.6 billion. "This is backed by a strong balance sheet, lower than expected capital spend and confidence in the long-term trajectory of our business," Mr Henry said. "This year, we contributed almost $US47 billion globally through wages, taxes, royalties, community contributions and payments to suppliers and shareholders." BHP held its capital guidance for exploration expenditure unchanged at $US11 billion. It also invested $US2.1 billion for a 50 per cent interest in the Vicuna joint venture, which includes one of the largest copper deposit discoveries of the past 30 years. Investors took the predominantly in-line report as a positive for BHP, pushing its shares 1.5 per cent higher to $42.07 in early afternoon trading. BHP's strong set of results highlighted the consistency of the business, RBC Capital Markets analyst Kaan Peker said. "The company is balancing its shift toward growth (namely in copper), and is continuing to pay compelling dividends."
West Australian
18 hours ago
- Business
- West Australian
BHP trims dividend to lowest number since 2017 and flags reduced spend on building new mines after 2027
Getting rid of its nickel pain plus record iron ore and copper output has boosted BHP's profit to $US9 billion ($13.9b), yet shareholder dividends have shrunk to their lowest in eight years. BHP's headline financial year profit figure was healthier, but cash flow dried up on the back of weaker commodity prices plus the company's splurge on a huge potash project in Canada and new copper assets in South America. The Big Australian recorded a 14 per cent profit rise for the 2025 financial year after making $US5.7b of asset write-downs during the 2024 financial year — mainly related to the suspension of WA Nickel, which it has now put up for sale. The ongoing legal fallout from the 2015 Samarco Dam failure in Brazil also weighed on BHP's accounts for the 2024 financial year. Underlying earnings were down 10 per cent to US$26b as revenue fell 8 per cent to $US51.3b. Free cash flow fell 55 per cent to US$5.3b and net debt jumped from US9.1b to $US12.9b. On average, BHP made 19 per cent less for a tonne of iron ore sold and steel-making coal sale prices slumped by 27 per cent. Copper prices rose 4 per cent. BHP declared a final dividend of US60¢, taking the total fully-franked investor payout for the financial year to $US1.10, which was higher than analysts had predicted but BHP's lowest figure since 2017. The total dividend payout for the 2024 financial year was $US1.46. BHP chief executive Mike Henry said the company had produced 'another strong year', pointing to record production results. 'We met full-year production guidance across all assets, and set new records in copper and iron ore,' he said. 'Copper production exceeded 2 million tonnes for the first time, up 28 per cent over the past three years. We maintained our position as the world's lowest-cost major iron ore producer at Western Australian Iron Ore where we delivered 290Mt — a new production record.' Mr Henry flagged a reduction in spending on new mines once the Jansen potash project in Canada comes online. First potash is slated for the middle of next year. Building the first stage of Jansen originally had a $US5.7 billion ($8.8b) price tag, but last month BHP said the expected spend has risen to between $US7b and $US7.4b ($11.4b). 'In each of the next two years we expect to spend US$11b in capital and exploration, reducing to US$10n on average each year between FY2028 and FY2030,' Mr Henry said on Tuesday. The BHP chief, who is rumoured to be stepping down from the top job next year, said the global economic outlook was 'mixed'. 'Growth is expected to ease to 3 per cent or slightly below in the near-term amid shifting trade policies, yet demand for commodities remains strong, particularly in China and India,' he said. 'Chinese copper demand outperformed in FY2025, while iron ore demand was resilient, driven by strong infrastructure investment and manufacturing activity in China. 'Steelmaking coal prices have softened due to oversupply, though policy shifts in China and new blast furnace capacity in Asia are expected to support the market. 'Potash markets are expected to continue to benefit from a growing and wealthier population and the need for more sustainable agriculture. We remain confident in the long-term fundamentals of steelmaking materials, copper and fertilisers, which are critical to global growth, urbanisation and the energy transition.'
West Australian
19 hours ago
- Business
- West Australian
BHP cuts dividend as commodity prices weigh on earnings
Strong production results have helped BHP post a lift in full-year net profit, but weak commodity prices continue to weigh on the mining giant's revenues, prompting a dividend cut. Net attributable profit in the year to June 30 rose 14 per cent to $US9 billion ($A13.9 billion), as BHP posted record iron ore and copper production and raised steelmaking coal production. The profit rebound came after a 39 per cent slip in the 2024 financial year due to writeoffs of mothballed nickel assets and a $A5.6 billion charge for the Samarco dam disaster in Brazil, and was still short of 2023's $US12.9 billion ($A19.9 billion) net profit result. With irregular items removed, underlying attributable net profit fell 26 per cent to $US10.6 billion ($A16.3 billion), shrinking the final shareholder to 60 US cents ($A0.92) per share, down from 74 US cents the year before. Likewise, revenue slipped $US4.4 billion ($A6.8 billion) due to weak coal and iron ore prices, but this was partially offset by copper price strength. Weaker revenues translated to weaker earnings before interest, tax, depreciation and amortisation, down 10 per cent to $US29 billion ($A44.7 billion), but underlying earnings from copper swelled to 45 per cent of group earnings to a record $US12.3 billion $A18.9 billion. Iron ore prices have been under pressure in recent years from weaker iron ore demand and steel oversupply, and the outlook for global economic growth was mixed, BHP chief executive Mike Henry said. "Growth is expected to ease to three per cent or slightly below in the near-term amid shifting trade policies, yet demand for commodities remains strong, particularly in China and India," Mr Henry said. "We remain confident in the long-term fundamentals of steelmaking materials, copper and fertilisers, which are critical to global growth, urbanisation and the energy transition." As for the shrunken dividend, the CEO noted it was "well above" BHP's minimum payout ratio. "This is backed by a strong balance sheet, lower than expected capital spend and confidence in the long-term trajectory of our business," Mr Henry said. BHP held its capital guidance for exploration expenditure unchanged at $US11 billion ($A16.9 billion) and invested $US2.1 billion ($A3.1 billion) for a 50 per cent interest in the Vicuña joint venture, which includes one of the largest copper deposit discoveries of the past 30 years.
Perth Now
19 hours ago
- Business
- Perth Now
BHP cuts dividend as commodity prices weigh on earnings
Strong production results have helped BHP post a lift in full-year net profit, but weak commodity prices continue to weigh on the mining giant's revenues, prompting a dividend cut. Net attributable profit in the year to June 30 rose 14 per cent to $US9 billion ($A13.9 billion), as BHP posted record iron ore and copper production and raised steelmaking coal production. The profit rebound came after a 39 per cent slip in the 2024 financial year due to writeoffs of mothballed nickel assets and a $A5.6 billion charge for the Samarco dam disaster in Brazil, and was still short of 2023's $US12.9 billion ($A19.9 billion) net profit result. With irregular items removed, underlying attributable net profit fell 26 per cent to $US10.6 billion ($A16.3 billion), shrinking the final shareholder to 60 US cents ($A0.92) per share, down from 74 US cents the year before. Likewise, revenue slipped $US4.4 billion ($A6.8 billion) due to weak coal and iron ore prices, but this was partially offset by copper price strength. Weaker revenues translated to weaker earnings before interest, tax, depreciation and amortisation, down 10 per cent to $US29 billion ($A44.7 billion), but underlying earnings from copper swelled to 45 per cent of group earnings to a record $US12.3 billion $A18.9 billion. Iron ore prices have been under pressure in recent years from weaker iron ore demand and steel oversupply, and the outlook for global economic growth was mixed, BHP chief executive Mike Henry said. "Growth is expected to ease to three per cent or slightly below in the near-term amid shifting trade policies, yet demand for commodities remains strong, particularly in China and India," Mr Henry said. "We remain confident in the long-term fundamentals of steelmaking materials, copper and fertilisers, which are critical to global growth, urbanisation and the energy transition." As for the shrunken dividend, the CEO noted it was "well above" BHP's minimum payout ratio. "This is backed by a strong balance sheet, lower than expected capital spend and confidence in the long-term trajectory of our business," Mr Henry said. BHP held its capital guidance for exploration expenditure unchanged at $US11 billion ($A16.9 billion) and invested $US2.1 billion ($A3.1 billion) for a 50 per cent interest in the Vicuña joint venture, which includes one of the largest copper deposit discoveries of the past 30 years.
AU Financial Review
17-07-2025
- Business
- AU Financial Review
Trump set to open $14trn US retirement market to crypto investments
New York | Washington | Donald Trump is preparing to open the $US9 trillion ($14 trillion) US retirement market to cryptocurrency investments, gold, and private equity in a move that would spur a radical shift in the way Americans' savings are managed. Trump is expected to sign an executive order as soon as this week that would open up 401k plans to alternative investments beyond traditional stocks and bonds, according to three people who have been briefed on the president's plans. Financial Times
